Oriental Securities: Maintains a "buy" rating on Hikvision with improved profitability and the promotion of development through AI big models.

The Eastern Securities research report pointed out that Hikvision's profitability has improved, and the development of AI large models has promoted growth. The revenue for the past 25 years was 92.5 billion yuan, which was basically flat compared to the previous year. The net profit attributable to shareholders increased by 19% to nearly 14.2 billion yuan. The company's profitability has significantly improved, with the gross profit margin increasing by 2.1 percentage points to 45.9%, benefiting from factors such as eliminating low-competitive products, price increases in storage, enhancing the leading company's bargaining power, and product upgrades brought by AI large models. Some investors do not understand the value of AI large models for the company's development. The bank believes that Hikvision not only integrates AI large model algorithms into the complete chain of technology, products, and solutions upgrades externally, but also empowers itself internally with large model capabilities. The company has introduced AI technology into various operations such as research and development, supply chain, marketing, and services to improve operational efficiency and capability. In the SMBG business, Hikvision Cloud Business has accumulated millions of registered users, with a 396% increase in monthly active users on the platform compared to the previous year; Hikvision Interconnected Platform has launched tens of millions of devices, serving millions of small and medium-sized enterprise users. It is predicted that the earnings per share for 2026-2028 will be 1.77, 2.08, and 2.37 yuan respectively, mainly adjusting the operating income and gross margin. Based on the average PE valuation of comparable companies in 2026 of 24 times, a target price of 42.48 yuan is given, and the "buy" rating is maintained.